Marketers of the Supplements Focus Factor and V-Factor Agree to Settle FTC Charges and Pay $1 Million

Marketers of the Supplements Focus Factor and V-Factor Agree to Settle FTC Charges and Pay $1 Million

For Release

March 17, 2004

Marketers of “Focus Factor,” a dietary supplement that purports to improve concentration, and “V-Factor,” a supplement that purports to enhance sexual performance, have agreed to settle Federal Trade Commission charges that they made numerous unsubstantiated advertising claims for the products. In one complaint, the FTC charges Vital Basics, Inc. of Portland, Maine, and its principals, Robert Graham and Michael Shane (VBI respondents), with not having adequate substantiation to back up claims they made about the efficacy of “Focus Factor” and the safety of “V-Factor Natural Pack.” The VBI respondents have agreed to a consent order containing provisions designed to prevent them from engaging in similar acts or practices in the future and requiring the payment of $1 million in consumer redress. In the other complaint, the FTC charges Creative Health Institute, Inc. of Corinth, Texas, and its principal, Dr. Kyl Smith (CHI respondents), with making unsubstantiated claims about Focus Factor’s ability to improve users’ focus, memory, mood, and concentration. The CHI respondents have also agreed to a consent order designed to prevent similar practices in the future and requiring the payment of $60,000 in consumer redress.

Focus Factor is a dietary supplement that contains, among other things, vitamins, minerals, botanicals, and amino acids. Dr. Smith developed Focus Factor, and advertised and sold it through Creative Health Institute from at least 1997 to 2000. Since 2000, the VBI respondents have advertised and sold Focus Factor, and the CHI respondents participated in the advertising of the product. The respondents allegedly marketed Focus Factor as improving the focus, memory, and concentration of healthy adults; alleviating stress and combating the fatigue, irritability, and mood swings that healthy adults experience; making children and teenagers feel more alert, focused, and mentally sharp; improving students’ ability to concentrate and their academic performance; improving senior citizens’ memory, mental clarity, and energy; improving adults’ ability to absorb information in books and to recall facts, figures, and names; and as having the desired effects in as little as one to 10 days. The Commission’s two complaints challenge these claims as unsubstantiated.

V-Factor is a dietary supplement that contains, among other things, yohimbine and L-argenine. The VBI respondents allegedly marketed V-Factor as a male sexual performance enhancer. The FTC alleges that the VBI respondents did not have substantiation for their claim that V-Factor is safe for virtually all men, and that they misrepresented that a clinical study proved that V-Factor is safe and effective at improving sexual response and function.

The Commission’s complaints further allege that both sets of respondents failed to disclose that certain endorsers who appeared in Focus Factor advertising had material connections with the product. In addition, the FTC alleges that the VBI respondents: (1) represented that consumer endorsements were made without compensation, and failed to disclose that consumer endorsements were solicited with a promise of a free 6-month supply of Focus Factor to those individuals whose testimonials were used in advertising; and (2) misrepresented that certain radio infomercials were independent radio programs, not paid commercial advertising.

The proposed consent agreement with the VBI respondents prohibits any representation about the safety, performance, benefits or efficacy for any food, drug or dietary supplement for:

the brain or any mental functions or processes;

sexual response, function, enhancement, or performance; or

the treatment, cure, mitigation, or prevention of any disorder;

unless the respondents possess and rely upon competent and reliable evidence substantiating that representation. In addition, the proposed settlement prohibits them from making unsubstantiated safety claims for V-Factor or any product containing yohimbine; misrepresenting the existence, contents, validity, results, conclusions, or interpretations of any test; failing to disclose material connections with endorsers; and misrepresenting the nature of paid advertising. Finally, the settlement requires the VBI respondents to pay $1 million in consumer redress.

The proposed consent agreement with the CHI respondents prohibits them from making any representation about the benefits, performance, or efficacy for any food, drug or dietary supplement for:

the brain or any mental functions or processes;

stress, anxiety, energy, mood, or behavior;

academic or business performance;

longevity, age-related memory impairment, or dementia; or

the treatment, cure, mitigation, alleviation of the symptoms, prevention, or reduction in the risk of any mental, brain, or central nervous system disease or disorder;

unless they possess and rely upon competent and reliable evidence substantiating that representation. The proposed settlement further requires that they clearly and prominently disclose any material connections with endorsers. Finally, the proposed settlement requires the CHI respondents to pay $60,000 in consumer redress.

The Commission vote to place the two proposed consent agreements and complaints on the public record was 5-0. Announcements regarding the two proposed consent agreements will be published in the Federal Register shortly. The agreements will be subject to public comment for 30 days, until April 16, 2004, after which the Commission will decide to make them final. Comments should be addressed to the FTC, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.

Copies of the complaints, proposed consent agreements, and analyses of the agreement to aid in public comment are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.